Elephants in the Room

The largest opponents to achieving your financial goals and what you can do to overcome them

By: Ryan Moore

In the financial world, I deal with people’s hopes and dreams and try to make them come into reality. But with every client and every portfolio, I always find problems that have to be overcome to achieve success. I would like to introduce the elephant in the room and highlight some of the largest opponents to achieving your financial goals.

► Lack of planning
We all have a goal in life – a place we desire to be. Think about your financial goal, and ask yourself a few questions: When do I want to retire? How much money do I need to retire? How is that money going to get there?

► Procrastination
Time is the most valuable tool in life; it’s the only thing that can never be regained once it’s lost. The best time to start saving for the future was the day you were born, but the second best time is today. Putting off what you can accomplish today will never leave you time ahead to enjoy the spoils of your hard work.
If you set aside just $1,000 when you are a child and just let it sit and earn 5 percent for 50 years, that thousand dollars will turn into $11,480. Doesn’t sound like much? Then set aside $10,000, and watch it turn into $114,674. That is the power of time.

► Getting on the wrong side of your money
Money is just a tool. How you use that tool can have a large effect on your life. Let me introduce you to a man named Mr. Interest. He likes working hard with your money, but let’s make sure he always works for you; if he isn’t working for you, I bet he’s working just as hard against you.
What if your dream is to retire on a yacht and enjoy the sea for the rest of your days? Say you buy that boat today; it costs $100,000 and you choose to finance it at 5 percent for 15 years, which brings the monthly cost down to $790.79 per month. That’s not too bad. But after you add in the interest that’s working against you, it raises the cost of that boat to $142,342.85. That’s almost 50 percent more! Do you really need that boat today, or would you rather have that 5 percent interest work for you and, in 15 years, be able to buy a nicer boat to retire on when you want to?

► Put a dollar in the “swear jar”
Did your mother ever make you put a dollar in the “swear jar” if you uttered those bad four-letter words? Let me add two worse four-letter words from the world of money: risk and fees. I’m not a very big gambler with my money, so in my opinion, those two words can be detrimental to your finances.

There are tons of smooth-talking “experts” out there who will give you the next big “tip” to make your money grow. Just turn on any news station. Have you watched “Wall Street” or, more recently, “The Wolf of Wall Street”? Sure, the dream of a get-rich-quick scheme sounds appealing, but how will you feel when you realize it was a scheme?

On Sept. 5, 2014, the S&P 500 hit an all-time new high – a record-breaking 2007.71 points. What generally happens after the market hits a record high? The mortgage crisis of 2008 wasn’t that long ago. I don’t like risking my hard-earned money, and I certainly don’t like paying someone to lose it for me.

► Taxes
Taxes are always going to be around; they are designed to make everyone’s quality of life a little bit better. They are used to build better schools and smoother roads, and to beautify our city. Do rising taxes have to be a fear in your retirement? No, they do not. Not with proper planning.

There are two types of retirement money in the world today: taxable and tax-free. Please take advantage of both! Taxes in retirement can play a critical role in your peace of mind, but with proper planning today, they don’t have to.

These are just a few of the major pitfalls I see almost every day. Remember that best piece of advice I can ever give is to be your own expert: Educate yourself on all the possibilities, then come into our office and let us help build you a safe retirement plan to turn your dreams into reality.